Standards: the partnership with your competitors

There is one partnership type where the people across the table are the companies you are trying to beat, and the outcome is a document that makes it easier for a customer to switch away from you. It is also the one that grows the whole market, and it is the one almost nobody in a partnerships job thinks of as their job.

I sat in those rooms for years. Voting member in the standards body while the codec standards that run most of today's video were being written. A tester on one of them, which means we built to the draft and reported what broke. A participant in the patent pool that decided who got paid for what. Slow, unglamorous, and the rules everyone else played by for the next fifteen years got written there.

Here is what a standard costs you. Somewhere in your product is a feature your sellers win with, and the standard will either absorb it, so everyone has it, or leave it out, so it stops mattering in an RFP. Either way you give it up. Your sales team will hate this for exactly as long as it takes a customer RFP to start requiring the standard, at which point the fact that you helped write it becomes the best thing your sellers have.

The failure mode is real and it is not the one people worry about. It is not that the standard leaks your secrets. It is that a cheaper competitor shows up carrying your standard, fully compliant, and the buyer no longer has a reason to pay for the version that came from the people who wrote it. That happens. The answer is to be a year ahead of the standard, not to stay out of the room.

The other failure is the standard that loses, and I carry a scar from that one. At a chip company, I sold a scalable extension of the video codec everyone was using into a very large networking customer, as one piece of a much bigger deal. It was the future, according to the room. Then the company reorganized, I was laid off, and nobody was left to walk the customer through the change request that would have let them drop it. The extension died in the market a few years later. The customer kept paying license fees on a codec they could not use, because the person who sold it was gone and the standard was still on the paper. A standard is a bet on where the market goes. Somebody has to stay in the seat long enough to find out whether it got there.

One test. Has the standard changed the wording of a single customer RFP? Not a press release, not an industry article. An RFP. If a buyer somewhere is now required to ask for the thing you helped define, the partnership with your competitors worked, and it worked for you first, because you saw the requirement coming.

Next Tuesday: the partnership nobody plans for, when your biggest competitor becomes your partner.

Which standard are you helping write, and which are you waiting to have written for you?

Part 12 of 15 in the Which Partnership series.